Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) and its Series 9 bondholders are entering another round in their confrontation. In its statement of response to the bondholders' petition to Tel Aviv District Court Judge Varda Alshech to summon Africa-Israel chairman Lev Leviev to testify about the company's debt settlement, the company today said that it will go bankrupt without the debt settlement.
Africa-Israel warned that there was a strong probability that it would append a going concern warning to its financial report for the third quarter of 2009, which it is due to publish by the end of November.
In the statement of defense, Africa-Israel dismisses the Series 9 bondholders' allegations. The company is demanding that only one bondholders meeting be held for all its bond series in order to vote on the debt settlement, and that no preference be granted to any creditor.
On November 10, Africa-Israel did not pay the NIS 550 million principle on the Series 9 bonds, but only the interest, claiming creditor preference.
Capital market sources take Africa-Israel's statement very seriously. After rising in morning trading, Africa-Israel's share plummeted in afternoon trading. The share was down 5% by mid-afternoon to NIS 44.36.
Africa-Israel emphasized that there is doubt that it will default on its loans without an agreement.
Africa-Israel stated, "Under the circumstances before us, this is not a marginal point, but a general and fundamental issue. There is no doubt that there is a real risk at this time of insolvency by the company, and without a settlement with its creditors, the company will not be able be able to repay its debts."
Africa-Israel goes on to state without equivocation that its financial report for the third quarter is liable to include a going concern warning.
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009